11.2.87
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3.
Although we are now in a much sounder position,
the lessons we have learned remain valid. Hong Kong is as
vulnerable as ever to external forces. It is inevitable
that we will experience volatility in our economic
performance. Whilst the economy has improved in 1986,
perhaps beyond our expectations, there are, as usual, some
clouds on the horizon. Protectionism still remains a
worrying threat. I have no doubt that in managing our
public finances we should not take action that is likely
to aggravate the volatility in our economy. We must at
all times pay careful attention to the underlying trends,
and ensure that our budgetary management is characterized
by stability.
4.
As far as possible I intend to adhere to the
policies that we have successfully followed in the past.
In particular, I see no place for deficit financing as a
permanent feature of fiscal policy, although I recognize
that on occasions it may be inevitable that deficits have
to be faced. They will also have to be dealt with so that
we return to balance without undue delay. It is much
easier to slide into deficit than to recover from that
unhappy state, and accordingly, a cautious approach is
needed even when we appear to be riding on the crest.
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